They said it: Investment advice to treasure

Great investors have a lot to teach us. Here are some powerful thoughts to keep in mind as you mind your money (and your life). They can help you start off the new year on sound footing:

Warren Buffett: “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” Common sense and the ability to resist acting out of fear or greed can help you build wealth.

Peter Lynch: “All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.” You’ll never stop making investing mistakes, but if you learn from them you’ll make fewer. Expect to lose some money now and then.

John Bogle: “If you have trouble imagining a 20 percent loss in the stock market, you shouldn’t be in stocks.” You should be able to imagine it and also expect and tolerate it. Stocks can be volatile.

Benjamin Graham: “The individual investor should act consistently as an investor and not as a speculator. This means ... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money’s worth for his purchase.” In other words, always invest rationally, thinking through all your decisions carefully.

Sir John Templeton: “The four most dangerous words in investing are: ‘This time it’s different.’” There’s a lot we can learn from history. For example, bubbles eventually burst. The quotation below reinforces this one:

Buffett again: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” The high road can take you lots of places.

Ask the Fool

Question: What’s “market share”?

Answer: The useful online glossary at investorwords.com provides a good definition: “The percentage of the total sales of a given type of product or service that are attributable to a given company.”

Consider smartphone operating systems, for example. According to Kantar Worldpanel ComTech, in the United States, Apple’s iOS recently held a 53 percent share of the market (up from 36 percent a year ago), vs. 42 percent for Android, 3 percent for Windows and less than 2 percent for BlackBerry OS. Recent global data from IDC for “smart” connected devices (which include smartphones, PCs and tablets) has Samsung with 22 percent share, followed by Apple at 15 percent, Lenovo at 7 percent, HP at 5 percent and Sony at 4 percent.

When assessing a company’s market share, it’s important to look at growth rates, too, along with profitability and the sustainability of those growth rates. Checking out current market share and market-share trends can be useful.

My dumbest investment

Overreacting: This is probably not the dumbest thing I’ll ever do, since I have plenty of life left, but earlier this year I sold my Walmart stock on someone’s recommendation. There was this scandal in Mexico, and all of a sudden the thinking on the stock went from buy to sell. Of course, a huge company like Walmart isn’t going to collapse on a little political thing, and here it is, a few months later, selling for a lot more than it was when I sold it.

The Fool responds: This past spring, Walmart was hit with allegations of spending millions on bribery in Mexico. In November, the company disclosed that its internal investigation was looking into bribery cases in Brazil, China and India, along with Mexico. It’s not good news, but it’s not likely to shut the company down, either.

When a company you own encounters trouble, determine whether it’s a short-term, addressable problem, or a truly vexing long-term problem. Sell on the latter and consider hanging on with the former.

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